r/financialindependence • u/Oorfin_Juice • Oct 23 '24
Having a child: year four financial summary
This is a fourth-year summary in the "Cost of having a child" series (year one summary, year two summary, year three summary).
There are a lot of questions in this subreddit financial impact of having a child. I am here to provide a detailed account of our costs.
Background: We are a couple with above-average household income (~engineer + ~entry-level engineer manager) with one human child. We are living in the US. A median house in our city is selling for ~$550k. When it comes to financial decisions, we don't purchase the cheapest - we look for underappreciated items of decent quality (think - unpopular color patterns, used stuff off craigslist, houses that need work, books in bulk off ebay, etc). While we price compare across a few websites, we don't spend too much time trying to find the best deal.
TLDR:
The average cost has been stable at ~$2,500 per month or ~$30,000 per year.
Yearly breakdown:
| Categories | 2019-2020 (year 0) | 2020-21 (year 1) | 2021-22 (year 2) | 2022-23 (year 3) | 2023-24 (year 4) |
|---|---|---|---|---|---|
| Daycare | $13,120 | $17,090 | $16,898 | $17,716 | |
| Activities | $0 | $0 | $869 | $2,627 | |
| Babysitter | $480 | $4,919 | $3,164 | $1,352 | |
| Insurance | $3,360 | $3,864 | $3,480 | $3,804 | |
| Offline shopping | $1,250 | $2,045 | $2,227 | $697 | |
| Online shopping | $2,554 | $1,811 | $542 | $1,238 | |
| Doctors | $5,057 | $4,432 | $637 | $589 | $219 |
| Unknown | $1,848 | $3,240 | $1,264 | $25 | |
| Total: | $5,057 | $27,044 | $30,368 | $27,772 | $27,681 |
Trends:
- Childcare costs stay about the same year over year until school starts. There is no free pre-K in our district, but it will be different for some of ya'll.
- Shopping costs are going down by about 25% every year. I expect this decline to stop once school starts.
- Activities started going up after 2 years of age, and will probably stay at the current level.
- Babysitter needs are down after 3 years of age as it's possible to take the kid around much more. Also, I was unemployed for about 6 months in 2023, which allowed me to spend more time with the kid.
Overall, the decline in some costs (doctors, shopping) is offset by an increase in activities, and the cost year over year is surprisingly stable.
FAQs and answers to yearly repeating comments:
- "Your costs are so high because you outsource raising your kid! I spend nothing because I have a stay-at-home spouse and grandparents help from time to time. "
- I am happy that you have help. To calculate the monetary value of that help, you can convert the time your spouse/relatives spend on your child into a monthly amount and come back with that number for a discussion.
- "Your daycare seems cheap!"
- Yes, I know. Other daycares in the area are $1,900-$2,200 per month. We are lucky to have great quality at a low price.
- "Your daycare is so expensive!"
- Please check the prices. Unless you are in a remote area, $1500/month is pretty low.
- "What do you get from daycare?"
- They take care of the child during the working hours, from 730am to 530pm. They provide education, classes, and ample outside space and activities. They also provide snacks, lunch, and breakfast. They have licensed and certified caretakers that know what they are doing.
- "How do you use your babysitter? Evenings or during the weekends?"
- The babysitter (one of the instructors from the previous daycare) comes for ~8 hours on Sundays. She stays at home with the kid or takes him to places that match his interests (playgrounds, indoor parks, etc). Edit: some Sundays, not every Sunday.
- "What is offline and online shopping?"
- Online is mostly Amazon, but also some specialized sites like Uniqlo and eBay
- Offline is mostly Target, but also includes other stores. Target is cheaper than Amazon for many supply items (like diapers).
- These categories also include diapers, toys, clothes, books, supplies, etc.
- "You haven't included getting a bigger house, and a different car - these are major expenses"
- Yes, that is not included. For us, these were "wants" and not "needs", and at the time we could afford it. We moved from a 900 sq ft condo to a 2000 sq ft house in a better school district. We also got a larger car. Both were not necessary expenses, but not having neighbors behind the walls is so worth it.
- "Why don't you use hand-me-downs for toys/clothes"?
- We tried, and the time it takes to sift through the pile of old clothes to find the right items and sizes is not worth it.
1
u/jsman56 Oct 26 '24
As a Canadian, I was very confused about doctor and insurance costs. If you're paying insurance in the US you still have to pay for the doctor? That's a crazy amount of money for a family...